Democrats gird for budget fight with Christie

By Maddie Hanna, Inquirer Trenton Bureau

Posted: February 26, 2014

TRENTON - On the eve of Gov. Christie's budget address, state Democrats appeared to be preparing for a fight with the embattled governor, vowing Monday to oppose any proposal that would scale back state contributions to public pensions.

With the revenue shortfall in the current $33 billion budget possibly exceeding $400 million, top Democrats criticized the governor's revenue projections and accused his administration of not doing enough to boost the economy.

Democrats at a Statehouse news conference offered no specific proposals to fill the revenue gap, but they reiterated that cutting back on the state's pension payments - projected to be $1.7 billion this fiscal year and $2.4 billion the next - would be a nonstarter.

"We're going to have this pension payment funded, or we won't pass a budget," said Senate President Stephen Sweeney (D., Gloucester), who appeared with Sen. Paul Sarlo (D., Bergen), the budget committee chairman.

The administration has not disclosed details of the governor's budget speech, scheduled for 2 p.m. Tuesday.

A Christie spokesman said Monday that Sweeney was deliberately misconstruing the governor's remarks about the pension issue.

Christie said in his State of the State address last month that conversation was needed now "about further changes to our pension system." He did not offer a specific proposal, but Democrats pounced on the comments.

On Monday, Christie spokesman Kevin Roberts accused Sweeney of "chasing a red herring," saying the governor "spoke explicitly" to the pension payment question on a call-in radio show last month.

"I never said I wasn't going to make the payment," Christie said on NJ 101.5's Ask the Governor program. "I will make the appropriate payment to the pension this year as determined by the pension boards and by my administration . . . What I said was if we don't deal with these costs, we're going to have to cut in other places."

Sweeney questioned the wording of Christie's remarks. "I want to hear him say he's going to make not the appropriate payment but the projected payment," he said.

Sweeney also objected to the prospect that cuts to programs could be framed as necessitated by the rising pension payments - the product of a law signed in 2011 by Christie that required state employees to pay more toward their pensions.

The state, meanwhile, was required to make full contributions to the system by 2018.

"We're not going to let this become, 'We have to cut this program because we have to make the pension payment,' " Sweeney said. "We are not going to pit the employees against the people of this state."

With state revenue lagging behind the administration's targets, Sweeney said Christie had done too little to expand the economy. State Treasury Department figures show revenue has grown 5.6 percent since last year, but Christie projected more aggressive growth.

"If the administration had done a better job on the economy, there'd be more revenue," Sweeney said.

Roberts said there had been "positive job growth every year the governor has been in office, after the Senate president's party controlled every branch of government and lost a quarter of a million jobs."

A Rutgers University analysis released in December found that New Jersey had recovered half the jobs it lost during the recession, while the country as a whole had recovered 83 percent of lost jobs.

Sweeney and Sarlo did not comment Monday on what could be done to close the current revenue shortfall - which Sarlo said was likely about $700 million, including unrealized Internet gaming revenue.

Last year, Christie delayed $400 million in property tax rebates to fill a shortfall. The state constitution requires balanced budgets.

Sweeney said he was open to a so-called millionaire's tax, which he said could net the state $660 million.

"It's only fair for the people who can afford to pay to pay more," he said.

Scoffing at the prospect Christie would pitch a tax cut, Sweeney said, "You got to be kidding me right now," adding that the governor first needs to restore cuts to other programs.

In addition to rising pension payments, debt service is projected to consume a greater portion of the state budget in the years to come.

Assemblyman Declan O'Scanlon (R., Monmouth) said that the state "has been run irresponsibly for a long time" and that previous administrations had structured escalating debt service costs as a "gimmicky way" of minimizing earlier payments.

"We have some pretty dramatic ramping up of debt service . . . you can't lay that at the feet of this administration," O'Scanlon said.